Clothing Stores
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 35,400 clothing retailers in the US generate revenue by selling a variety of apparel and apparel-related products to consumers. Clothing stores sell primarily new clothing, and may specialize in a particular category, such as men, women, children, infants, families, or accessories. Family clothing stores account for 57% of industry sales. Women’s clothing stores are 19%; other specialty stores are 20%, and men’s clothing stores are 4%.
Seasonality of Demand
Most clothing stores experience major seasonal fluctuations during the winter holiday and back-to-school periods.
Trends and Fads Rapidly Change
The clothing industry is in a constant state of change, driven by fashion trends and fads.
Industry size & Structure
The average clothing retailer employs fewer than 25 workers and generates $6 million annually.
- The clothing retail industry consists of about 35,400 companies that employ 852,000 workers and generate about $225 billion annually.
- Family clothing stores account for 57% of industry sales. Women's clothing stores are 19%; other specialty stores are 20%, and men's clothing stores are 4%.
- The industry is concentrated at the top, and highly fragmented at the bottom. The top 20 firms account for 55% of industry sales.
- The average independent clothing retailer operates out of a single location, employs fewer than 10 workers, and generates between $300,000 and $900,000 annually.
- The industry includes national chains, regional chains, and independent retailers. Some large apparel manufacturers have retail operations.
- Large companies include TJX Companies (TJ Maxx, Marshalls), The Gap, Victoria's Secret & Co., American Eagle Outfitters, and Ross.
Industry Forecast
Clothing Stores Industry Growth
Recent Developments
Sep 7, 2024 - Clothing Retailers Advancing Overseas Orders
- Clothing, furniture, and electronics retailers are advancing their overseas orders to avoid potential shipping disruptions later in the year during peak shopping season, according to the Wall Street Journal. Import containers of clothing, furniture, and other products are arriving at US ports in much larger numbers than normal as companies try to manage higher freight rates, geopolitical tensions, and shipping delays. Import volumes at the Los Angeles and Long Beach ports in June 2024 reached their strongest level since the pandemic-related heights of July 2022. In addition, container rates have reached levels not seen since the pandemic. The short-term contract rate to ship a container from Asia to the US West Coast on July 17 was $7,806, four times greater than last year, according to transportation analytics firm Xeneta. The WSJ report noted that the ratio of inventories to sales at US retailers increased to 1.31 in May 2024, the highest level since May 2020. Importers are counting on consumers to increase their spending in the second half of the year to avoid being stuck with excess inventories.
- Producer inflation for clothing retailers has mostly increased during the first five months of 2024, according to data from the US Bureau of Labor Statistics (BLS). Employment by clothing and clothing accessories retailers declined at the start of 2024 before a gain in May. Wages at clothing and clothing accessories have declined year to date through May 2024, with a brief uptick in April. Average wages for nonsupervisory employees at clothing and clothing accessories retailers reached $20.83 per hour in May 2024, per the BLS.
- Clothing and accessories store sales grew 5.3% unadjusted year over year in June 2024, supported by solid consumer spending, according to the CNBC/NRF Retail Monitor released by the National Retail Federation. The category declined 0.1% seasonally adjusted month over month. Total retail sales, excluding automobiles and gasoline, increased 3.4% unadjusted year over year in June 2024 and 0.4% seasonally adjusted month over month. Five out of nine retail categories were higher in June compared to a year ago, led by online sales, general merchandise stores, and clothing and accessory stores. According to NRF President and CEO Matthew Shay, “Consumers are being thoughtful about their spending, prioritizing non-discretionary purchases as they continue to face high interest rates and lingering inflation.” The CNBC/NRF Retail Monitor uses actual, anonymized credit and debit card purchase data compiled by Affinity Solutions.
- Parents plan to spend 22% more on back-to-school shopping in 2024 compared to a year ago, with Walmart, Amazon, and Target as the top destinations, according to a new JLL survey of 1,026 parents in Retail Dive. Parents expect to spend $475 per child in 2024 compared to $390 in 2023. While parents in most income brackets plan to spend more than last year, parents earning less than $50,000 are expected to decrease their budgets due to inflation concerns and seek out sales and coupons. Higher-income parents are turning to private labels to save money during their back-to-school spending. Wealthier households (earning over $150,000) are increasing their budgets the most. The stores shopped at the most for back-to-school are Walmart (46%), Amazon (35%), and Target (32%), while other major destinations include Costco (6.5%), Old Navy (3.8%), and Dollar General (2.8%). About a quarter of shoppers have already started their back-to-school shopping, with another 22% beginning shopping in June, 20% in July, and almost 17% in August.
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